Charities have blasted the government's 'damaging' new lobbying bill, saying it could have a "chilling effect on freedom of expression."
Talks with ministers have failed to resolve differences, and now charities fear they could face criminal prosecution if they speak out on matters of public interest and concern.
Oxfam, the Royal British Legion, and the Salvation Army are also among key organisations that fear the coalition bill, which will widen the definition of election campaigning by third parties, is so complex and unclear that it is likely to be "impossible" to follow.
The lobbying bill will curtail the ability of charities like Oxfam and non-party groups to campaign on political issues
Official watchdog the Electoral Commission has warned of concerns about the 'workability' of the legislation and legal advice commissioned by the NCVO warned of a 'chilling effect'.
The National Council for Voluntary Organisations (NCVO) said today it remained firmly opposed to reforms it believes will prevent charities from speaking out after seeking expertise from a QC who specialises in election law.
In the legal opinion submitted to the Cabinet Office, Helen Mountfield QC concluded: "Uncertainty about what the law requires is likely to have a chilling effect on freedom of expression, putting small organisations and their trustees and directors in fear of criminal penalty if they speak out on matters of public interest and concern.
"The restrictions and restraints are so wide and so burdensome as arguably to amount to a disproportionate restraint on freedom of expression."
The government's proposals, which will be debated by MPs for the first time tomorrow, would introduce a statutory register of lobbyists to identify whose interests were being represented by consultant lobbyists and those who were paid to lobby on behalf of a third party.
The bill would also set a £390,000 cap on the amount any organisation - excluding political parties - could spend across the UK during elections.
This would in turn significantly limit the ability of charities and other non-party groups to campaign on political issues in the 12 months before a general election.
Downing Street rejected warnings that new legislation on lobbying will prevent charities from speaking out on matters of public interest.
Only the small number of charities which explicitly promote particular parties or candidates will be caught by the provisions of the Transparency of Lobbying, non-Party Campaigning, and Trade Union Administration Bill, said prime minister David Cameron's official spokesman.
But NCVO director of public policy Karl Wilding said its concerns remained, branding the legislation as "all stick and no carrot", he said.
"We are clear that this Bill is damaging. It would be fair to say that the Leader of the House and the minister continue to have a different interpretation.
"I am not still entirely clear what they are trying to achieve. What we have at the moment is not perfect but it can be made to work better."
It was important to have an electoral system that voters trusted, he said, and charities and voluntary bodies had responsibilities, especially during election campaigns.